Wednesday - November 9, 2022

Today's newsletter will take 3.37 minutes to read.

DRS UPDATE: 57.10*% (estimated percent of GME shares direct registered)

*source: Computershared.net

On tap this morning:

• Wednesday recap

• GameStop NFT update

• Did you know?

• Rising Interest Rates are a Third Front in a war Against BBBY & GME

• Ryan Says

Good Morning! This is Mother Squeezer, the newsletter that kicks it with you and brings you clever life hacks, updates and insights, along with timely information about our favorite Activist Investor, Ryan Cohen, and our favorite stocks - GME and BBBY.

Wow - some incredible drama in the crypto world yesterday. FTX, the #2 centralized exchange is said to be insolvent and the #1 exchange, Binance may be acquiring it. This is a very dark time for the crypto industry with ripple effects expected to be felt for days/weeks/months.

It's speculated that leverage and derivatives is what did FTX in. Sound similar to what we're dealing with too? They can only kick this can down the road for so long before it can't be kicked no more.

What do you call a conversation between two garbage cans. Trash Talk. /joke

Speaking of kicking the can, next time you need a holder to watch a movie on your phone, try today's clever life hack:

Karate-chop a Soda Can and Turn it into a DIY Phone Stand

Did you hear about the guy who got hit in the head with a can of soda? He was lucky it was a soft drink.

Some really good late breaking news released by BBBY this morning: the bond offer looks to be attractive to some holders!

Wednesday Recap: BBBY traded between a low of $3.85 and a high of $4.12 before closing at $4.00. Trading volume was 7.87 million shares.

Cost to borrow: There were 450,000 shares available to borrow this morning and as of now, 250,000 remain. The cost to borrow has remained at 7.2%. 

Pre market: Bed Bath and Beyond is trading down $0.04 to $3.96 a decrease of 1.00% on over 115 thousand volume.

Max pain: The current max pain for BBBY has dropped to $4.00.

Wednesday Recap: GME traded between a low of $24.11 and a high of $25.85 before closing at $25.14. Trading volume was 4.69 million shares.

Cost to borrow: There were 650,000 shares available earlier this morning. Currently there are 400,000 remaining. The cost to borrow has remained steady at 9.0%.

Pre market: GameStop is trading down $0.64 to $24.50 a decrease of 2.55% on 25 thousand volume.

Max pain: The current max pain for GME has dropped to $26.00.

GameStopNFT tweeted:

Gods Unchained is one of the most popular games with assets on GameStopNFT

Did you know?

Used aluminum drink cans can be recycled and back on supermarket shelves as new drink cans in as little as 60 days.

Rising Interest Rates are a Third Front in a war Against BBBY & GME

Any hedge fund that is shorting BBBY & GME is fighting a war of three fronts:

Front 1: The Short Hedge Funds are placing bets using margin that is now subject to raising interest rates.

Front 2: Everything they hold as collateral (long Amazon, Microsoft, Tesla, etc) is hemorrhaging value, increasing the chances of failing a margin call.

Front 3: DRS is removing liquidity from the very instrument they are borrowing as they short it. As DRS continues, the cost to borrow will rise as the SHF cannot stop continuing to force the price down by shorting.

In his acclaimed book The Price of Tomorrow, Jeff Booth says, "It wasn't housing itself that caused the 2008 bubble. If it hadn't been housing, it would have somewhere else that easy credit was flowing to." p22.

In 2008 failing mortgage loans didn't not just destroy liquidity in the mortgage market, it destroyed liquidity in all of finance because packaged mortgage debt acted as collateral for daily business-to-business loans. Need $100k for payroll? Post $100k of loans you hold and repay me tomorrow.

When an entire sector of debt suddenly became unusable as collateral, this caused everyone in finance to question all forms of possibly toxic debt.

In 2008 we tried to put out the fire of one debt crisis by dousing it with more debt. Same with Covid. It takes $4 of debt to increase GDP by $1. (The Price of Tomorrow, p12) "...A bubble pops when people wake up and realize that the debt can never be paid off." (Same, p22)

When will the boomers that shorted BBBY & GME realize that they have to pull out? They are subject to this same three-front war. It only takes one domino to fall. Contagion will inflame all bad debt.

(Adapted to Mother Squeezer from u/gnateheiro)

Ryan Says

Ryan replied to this Blockbuster tweet back in July:

We believe there will be a blockbuster announcement coming in the near future involving a couple of stocks we like.

Spread the Word

We love Ryan Cohen and think he's the greatest Activist Investor of our generation. We are passionate followers of his moves and words and would love for others to know more about this great leader. We feel strongly that life is all about learning who to follow. If you have someone that needs more RC in their life, share Mother Squeezer with them!

Some of our Favorite Resources

Start Here

BBBY: Ben - Mr. Business

GME: Richard Newton

Computershared.net

For errors, omissions or if you have something to share? Let us know!

Financial Disclaimer: None of this is meant to be financial advice. We love Ryan Cohen, RC Ventures, GameStop and Bed Bath and Beyond, and like learning and sharing these insights and commentary.